With Windows top line up 23%, Microsoft beats with FQ3 EPS of $0.72, misses on revenue of $20.49 billion

Today Microsoftreported its fiscal third quarter 2013 financial results, including revenue of $20.49 billion, and earnings per share of $0.72. Net income for the quarter was $6.06 billion. The street had expected revenue of $20.5 billion, and earnings per share of $0.75 on a non-GAAP basis. GAAP estimates rested around the $0.68 mark.

In the preceding fiscal quarter, Microsoft revenue measured $21.46 billion, and its earnings per share of $0.76. A key statistic: in that quarter, the Windows division reported top line of $5.88 billion.

Microsoft’s core Windows business has had a turbulent few quarters, with the release of the Windows 8 operating system and a noted decline in PC sales. According to the IDC group, total PC units shipped fell 13.9% in the first quarter, which corresponds to Microsoft’s fiscal third.

Microsoft’s results today also include a full quarter’s performance of the Surface line of tablets, a controversial and only partially successful – thus far – foray into the OEM world. Microsoft’s Surface tablets have likely moved around 2 million units by this date.

In normal trading today, Microsoft was essentially flat, besting a bearish Nasdaq. In after-hours trading the company is up just roughly 1.5%.

Division Performance

The Windows division had revenue of $5.7 billion, up 23%.

The Business division had revenue of $6.32 billion, up 8%.

The Entertainment and Devices Division had revenue of $2.53 billion, up 56%.

The Online Services division had revenue of $832 million, up 18%.

The Server & Tools division had revenue of $5.04 billion, up 11%.

All told, this was a solid quarter for Microsoft, with its divisions booking respectable revenue gains. However, keep in mind a number of special provisions in the case of the Windows divisions that impacted the figure. As Microsoft itself noted in its release: “Adjusting for the recognition of revenue related to the Windows Upgrade Offer, Windows Division non-GAAP revenue was flat.”

The Online Services division lost less money than before, setting fire to a mere $262 million in the quarter. In the comparable 2012 quarter, the group lost $480 million. Partially driving the rise in Entertainment revenue was Xbox’s Live service picking up 18% more members, ending the quarter with 46 million.

Microsoft also today announced that its CFO, Peter Klein, is stepping down after four years in that role, and 11 years at the company.